Monday July 21st, 2014 - 9:43AM
Newell Rubbermaid has announced that the company has signed a definitive agreement to acquire Ignite Holdings, LLC from North Castle Partners, a leading private equity firm focused on consumer businesses that promote healthy, active and sustainable living.
Ignite offers beverage containers sold under the Contigo and Avex brands. Ignite is expected to deliver $125 million of net sales in 2014, and has a strong growth track record in the on-the-go thermal and hydration beverage containers market, the company said. According to a release, the purchase price is $308 million, subject to customary working capital adjustments. The acquisition is expected to be accretive to Newell Rubbermaid's growth rate, normalized operating income margin and normalized EPS in the first year. Additionally, the company plans to reinvest a portion of Ignite's profitability to more aggressively build the Contigo and Avex brand, the company said.
"Ignite has a great track record of growth, establishing a leading share position in two of the fastest growing consumer durable categories in North America. Their commitment to leverage great design to deliver differentiated products is evident in their results. The acquisition of Ignite marks the next step in the Growth Game Plan as we transform Newell Rubbermaid into a larger, faster growing, more global and more profitable company," Newell Rubbermaid President and CEO Michael Polk said.
The acquired business will become part of the Home Solutions segment with Contigo and Avex joining the company's Rubbermaid, Calphalon, Goody and Levolor brands.
"Ignite's focus on design, product performance and constant innovation is a seamless fit with our Growth Game Plan strategy," Mark Tarchetti, chief development officer said. "The Contigo brand has set the standard for the category and we are proud to make it part of our portfolio. This acquisition creates the opportunity to build a global beverage container business leveraging both the premium Contigo and mainstream Rubbermaid brands. We intend to invest behind the business to build on Ignite's current strong momentum, expanding product lines, channels of distribution and geographic footprint over time."
"We are delighted to have found a long-term strategic owner for the business who shares our pride in the achievements and strength of the company, but can bring a new level of investment and global perspective," said Sami El-Saden, CEO, Ignite Holdings.
The acquisition is expected to be financed through a combination of organic cash flow and available borrowings and is expected to close by the end of the third quarter, 2014, subject to customary conditions and regulatory approvals, the company said.